Defined benefit plans (pension plans) — which are paid in
addition to an employees' salary — have been declining, as
defined contribution plans (like 401k plans) have been on the
rise. But now Michael Kitces at Nerd's Eye View is asking whether
MyRa — a program of small Roth IRAs for those who do not have
access to company retirement savings plans introduced by
president Obama during his State of the Union address — could
signal the "beginning of the end of 401ks."

"What’s significant about the MyRA is that it provides the
mechanism for employees to someday be defaulted into automatic
enrollment (or controversially, potentially even mandatory
enrollment) and automatic escalation of future contributions,
just as is now available with 401(k) plans," writes Kitces.

This he says is intended to bring the two more in lock-step, "yet
the IRA/MyRA version would be more easily portable (as it’s not
tied to the employer in the first place), and the only material
difference would be the contribution limits (which can be
changed). …Employers may simply be able to pay their employees a
full salary, and let the employee decide whether and how much to
allocate to everything from health insurance to retirement
contributions and anything else."

The 4% rule says investors can withdraw 4% of their savings in
the first year of their retirement and then increase it each year
in keeping with inflation. Katherine Roy, J.P. Morgan Asset
Management's chief retirement strategist, however thinks
investors should be willing to modify this, and instead advisors
should help clients adjust their spending when portfolio returns
are lower and vice-versa, reports Debbie Carlson at FA Mag.

Economics 101 teaches that recoveries are accompanied with rising
rates, but in recent history it's been hard to see this. "Bonds
tend to have a hard time selling off if central banks are not
tightening," Jan Loeys of JP Morgan writes. "The steadily lower
growth rates over the last 3 recoveries have induced steadily
lower policy rates, which in turn have created faster and a
greater number of asset bubbles that have been imploding before
inflation has a chance to accelerate and central banks can move
into a tight stance."

Health Savings Accounts (HSAs) are tax deductible savings
accounts associated with plans that have high deductibles and
Louis Kokernak at Haven Financial Advisors thinks investors and
advisors should look into these. "The HSAs can be used as a tax
shelter to build long-term savings for medical expenses in the
future," he writes in the WSJ.

"Like a 401(k), the contributions you make to an HSA are tax
deductible. And like a Roth IRA, the distributions are tax free,
as long as the money is spent on qualified medical expenses. HSAs
truly offer the best of both worlds," he writes. That being said
HSAs don't make sense for people with chronic conditions and that
don't have job security.

Hedge funds continue to have a rough year. A new report from
Preqin shows that the best-performing strategy isn't up even 1%.
Event driven funds, the best performing strategy in April was up
0.6%, while the worst-performing strategy, long/short is down an
average of 0.42%.